NZX-listed retirement village company Metlifecare Ltd has set the timetable for its takeover by Swedish private equity investment fund EQT Infrastructure IV Investments Sarl.
Meanwhile, EQT said on Monday it had opened an office in Sydney to support accelerated efforts in the Asia-Pacific region, with specific focus on Australia & New Zealand.
At the foot of this article you will see a very long list of previous stories about Metlifecare. At a glance, you will see there’s been a turbulent corporate history. Click on many of those stories and you will see numerous misgivings about the corporate performance.
The EQT sale agreement
Metlifecare Ltd advised the NZX & ASX on 30 December that it had entered into a scheme implementation agreement with EQT for EQT’s newly incorporated local subsidiary, Asia Pacific Village Group Ltd (APVG), to acquire all shares in Metlifecare for $7.00 cash/share, subject to certain conditions including Metlifecare shareholder approval.
Metlifecare said today it would write to shareholders in late March, ahead of a shareholders’ meeting scheduled for 29 April.
Subject to shareholder & High Court approval, and satisfaction of other conditions, the transaction should be implemented in May.
APVG has applied for Overseas Investment Office approval. Metlifecare understands the application is on track to be determined before the shareholders’ meeting.
Metlifecare has appointed KordaMentha to act as the independent advisor, the Takeovers Panel has approved this appointment and KordaMentha’s report will accompany the material to be sent to shareholders.
The condition in the scheme implementation agreement requiring consent to the transaction from the statutory supervisors for Metlifecare’s 28 retirement villages has been satisfied. Metlifecare is working towards satisfying the other customary conditions, such as banks’ consents.
The Metlifecare board has unanimously recommended shareholders vote in favour of the transaction, subject to the scheme price being within or above the valuation range to be contained in KordaMentha’s independent advisor’s report, and in the absence of a superior proposal (as defined in the implementation agreement).
Metlifecare chair Kim Ellis noted in today’s announcement that some of Metlifecare’s larger institutional shareholders had ceased to be substantial shareholders since the announcement of the transaction on 30 December, having sold down a large part of their holdings in the company through the market.
“Metlifecare understands sellers of those shares are primarily rebalancing their portfolios in anticipation of likely completion of the transaction in May,” he said. “The purchasers of these shares appear to be investors looking to profit from the difference between the current market price of approximately $6.89/share and the transaction price of $7.00/share. Metlifecare has no reason to believe that the transaction will not be strongly supported by shareholders.”
Who is EQT?
The funds group’s parent, EQT AB, based in Stockholm, Sweden, has 19 active funds invested in Europe, the US & Asia and €41 billion ($NZ70 billion) of assets under management.
EQT’s “About” page answers one question that occurred to me: “Why multiple business segments rather than one in which EQT can become specialist?”
Its answer: “EQT offers access to key competencies in strategic business development, structural change & financial analysis. In principle, EQT invests in all sectors & companies in which EQT as an owner can serve as a catalyst for change to achieve genuine, permanent improvements. EQT has access to sector-specific knowledge through its extensive EQT network. The network is closely engaged in the process for acquiring, managing & exiting investments.”
Another question, also answered: “What is EQT’s contribution to the companies acquired?”
The EQT answer: “In our view, there are many companies that operate in attractive industries but lack entrepreneurial drive & business development competence. EQT invests in companies in which it can serve as a catalyst for change, to allow companies to transform into great & sustainable companies by making genuine, long-term improvements. EQT also offers access to an extensive network of experienced advisors providing advice, credibility and serving as door openers in various situations.”
In another paragraph indicating what EQT’s about, it says: “EQT Infrastructure IV seeks to continue its historically successful strategy of investing in strong-performing infrastructure companies with the potential for significant value creation in sectors with suitable infrastructure characteristics & favourable market trends. The fund will make primarily equity or equity-related investments typically ranging between €100-600 million where the fund will either hold control or co-control positions or otherwise be capable of exercising a significant influence.”
EQT in Australia
EQT’s new Sydney office will be led by Ken Wong, managing director & head of EQT Australia & NZ, who’s been leading EQT’s coverage efforts from Singapore and will return home to Sydney.
The fund holds investments in Australian cloud & managed service provider Nexon Asia Pacific, but said having local staff should help it increase investment in the region.
EQT deputy managing partner & Asia-Pacific chair, Thomas von Koch, commented: “EQT is excited to expand into Australia & New Zealand, markets in which EQT’s Nordic values & unique governance model are well received.
“EQT has previously had positive experiences from investing in Australia and are encouraged by the recent traction we’re getting in (this) market. We believe that Australia & New Zealand are some of the most interesting markets in the Asia-Pacific region and one where EQT can make a positive impact on portfolio companies as well as local communities.
“Putting EQT’s flag on the ground in Sydney is part of our global expansion strategy & ambition to establish a local presence across the regions EQT invests in. With a local team in Sydney, EQT is well positioned to stay close to both its portfolio companies and to capture new investment opportunities in the region.”
20 December 2019: Metlifecare attracts more takeover interest as board puts value well above first offer
26 November 2019: Metlifecare appoints offer advisor, sees share price rise 20% in 3 weeks
20 November 2019: Metlifecare gets buyout offer, suspends share buyback
10 September 2019: Metlifecare to run bond offer next week
28 August 2019: Lower revaluations slash Metlifecare profit
27 February 2019: Metlifecare happy with half-year result, but some figures raise questions
28 February 2018: Metlifecare property value gain slashed
30 August 2017: Metlifecare hits $3 billion of assets
9 September 2016: Metlifecare clarifies targets
3 March 2014: Metlifecare moves on strongly from merger
29 November 2013: Controlling Australian stake in Metlifecare now zero, Infratil at 19.9%
22 October 2013: 37.7% of Metlifecare to be sold as escrow period finishes
15 July 2013: Australian institutions get Metlifecare stake down to 37.7%
10 July 2013: Metlifecare offer oversubscribed
31 October 2012: Metlifecare AGM still a “suits” affair despite lift in retail shareholders
24 August 2012: Metlifecare sets stage for post-merger growth – but first there’s a big loss
19 July 012: Bookbuild completed for RVNZ’s Metlifecare selldown
22 June 2012: Metlifecare gets merger approval at much-reduced payout
9 May 2012: Metlifecare deal at 55% NTA
13 January 2012: Macquarie exits Metlifecare fund management
8 November 2011: Australians’ Metlifecare sell-off succeeds at 54% of entry price
26 February 2010: Revaluations get Metlifecare up – but the line the listeds focus on shows a flat return
23 October 2009: Metlifecare: Aussie suits v half-dozen Kiwi punters
13 February 2009: Revaluations send Metlifecare into further loss, rights issue proposed
20 August 2006: Metlife boosts earnings/share 31% in year (but it didn’t tell you that)
28 April 2006: Lack of small investors cuts business detail out of Metlife meeting
21 November 2005: Macquarie gets 68% of Metlife before shareholders see independent report
20 October 2005: Australian bid for Metlifecare goes ahead at $3.90/share
3 October 2005: Macquarie & FKP move on Metlife
24 June 2005: Cook & Todd back where they were at Metlife
Attribution: Metlifecare, EQT.